BMW opens its first Mexico plant as the US government threatens tariffs on Mexican goods
The Bavarian automaker is in an unenviable situation as it waits for a decision on tariffs from the US government.
Hey, you know what would be kind of a bummer? What if you were a gigantic multinational automobile manufacturer and you just finished opening your first plant in a country that is currently being threatened with import tariffs by another country that is among the biggest consumers of your cars?
That would be pretty awkward, right? Well, BMW finds itself in just that position after the grand opening of its San Luis Potosí plant in Central Mexico, according to a report Thursday by Automotive News.
The San Luis Potosí plant is one of three plants that BMW is opening to help produce its new global 3 Series platform. The others are in Germany and China -- other potential targets for Trump tariffs, though those cars will likely be produced for domestic consumption rather than export, unlike those in Mexico.
How much of an impact those tariffs would have on US vehicle prices all depends on how long it takes Mexico to come to an agreement with the US if the US goes through with its threat. At the initial level of 5%, BMW could likely deal with the increased $2,000-$5,000 in cost.
If the tariff escalates all the way to the proposed maximum of 25%, that would be an additional $10,000 to $12,000 in cost and would essentially make the San Luis Potosí factory useless for US imports. That would be less than ideal considering BMW has just sunk around $1 billion into getting the plant operational.
So where does this leave BMW? Pretty much in the same place that it's left the rest of the automotive industry -- hopping nervously from foot to foot, trying to keep its cool while politicians make their threats. In a word, it leaves BMW waiting.
BMW didn't immediately respond to Roadshow's request for comment.
